Non-financial information and cost of equity capital: an empirical analysis in the food and beverage industry

Raimo, Nicola; Nuccio, E. De; Giakoumelou, Anastasia; Petruzzella, Felice; Vitolla, Filippo

doi:10.1108/bfj-03-2020-0278

Cited by 64 publications

(109 citation statements)

References 113 publications

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“…Following prior GHGD‐to‐COC studies (e.g., Albarrak et al, 2019; Bui et al, 2020; Kumar & Firoz, 2018; Lemma et al, 2019; Maaloul, 2018; Raimo et al, 2020), we included a number of control variables. We control for the disclosure score of ESG practices (ESGScr) given the empirical evidence of its association with the COC (Plumlee, Brown, Hayes, & Marshall, 2015); Richardson & Welker, 2001.…”

Section: Methodsmentioning

confidence: 99%

“…Third, a study examining the GHGD–COC nexus in the UK context is virtually nonexistent. Fourth, from a methodological perspective, all prior GHGD–COC studies have used the conventional linear regression methods, including the ordinary least squares (OLS) model (Albarrak et al, 2019; Kumar & Firoz, 2018; Li et al, 2017; Maaloul, 2018), the fixed‐effects regression model (Raimo et al, 2020; Trinks et al, 2017), the two‐stage least squares (2SLS) regression model (Bui et al, 2020) and the three‐stage least squares (3SLS) regressions (He et al, 2013; Lemma et al, 2019) (see Table 1). These traditional linear regression models summarise the average association between different dependent and independent variables on the basis of the conditional mean function E ( y | x ), which provides a partial understanding of the studied relations (Cobb‐Clark, Kassenboehmer, & Sinning, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

“…In stating these objectives, our study purports that firms, which are deemed to adhere to the 2013 CDR, are likely to enjoy a lower cost of capital in the United Kingdom simultaneously. By doing so, we respond to the recent calls (e.g., Albarrak et al, 2019; Alsaifi et al, 2020; Bui et al, 2020; Raimo, de Nuccio, Giakoumelou, Petruzzella, & Vitolla, 2020) to assess the effectiveness of mandatory GHGDs (i.e., 2013 CDR) in reducing a firm's COC and how environmental regulations, such as CDR, can moderate the GHGD–COC nexus. Our results are, therefore, expected to help managers, practitioners and policymakers in evaluating the effectiveness of the mandatory nature of GHGD in lowering the COC in the United Kingdom.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship

2020

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This paper examines the effects of disclosing greenhouse gas (GHG) information mandatorily on the cost of equity capital (COC) using a longitudinal unbalanced panel database of the United Kingdom's FTSE 350 firms for the period 2011–2016. We use a nonlinear panel quantile regression (PQR) model to examine the relationship between GHG disclosure (GHGD) and COC in the United Kingdom. This technique was supplemented by conducting a two‐step generalised method of moment (GMM) estimation to address any concerns related to the potential existence of endogeneity problems. Our findings suggest that high‐level GHGD appeared to be negatively associated with COC up to a certain level, which is known as the turning point; then, any increase in GHGD is likely to increase the COC. This means that the nonlinear association between GHGD and COC is evidenced in our study and takes a U shape. Likewise, our findings are associative of a moderating effect of the 2013 carbon disclosure regulation (CDR) on the GHGD–COC nexus. We argue that mandatory GHGD and GHG risk are linked so that those companies that are associated with higher GHG risk have a tendency to be better disclosers. Consequently, we urge regulators to design GHGD regulations in a way that mirrors corporate environmental risk and leads to a lower COC in order to align the interests of corporations with those of the society at large.

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Section: Methodsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship

2020

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“…This study examines the impact of audit committee attributes on integrated reporting quality (IRQ). The academic literature on corporate disclosure has raised several concerns about the usefulness of traditional financial statements in enabling better decision‐making processes for investors (Amir & Lev, 1996; Francis & Schipper, 1999; Gray, 2006; Adams & Simnett, 2011; Liu & Wang, 2012; Raimo, de Nuccio, Giakoumelou, Petruzzella, & Vitolla, 2020). Traditional financial disclosure provides incomplete information and has limits connected mainly to the poor representation of intangibles (Adams & Simnett, 2011) and historical orientation (Gray, 2006).…”

Section: Introductionmentioning

confidence: 99%

Do audit committee attributes influence integrated reporting quality? An agency theory viewpoint

et al. 2020

Self Cite

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The limits of financial disclosure in meeting the investors' needs have led to the request for reporting frameworks capable of incorporating information of different nature. Integrated reporting (IR), which is the latest novelty in organisational reporting practice, promises to bring together material financial and non‐financial information. IR has received considerable academic attention in recent years. However, little attention has been paid to the role of the audit committee in IR processes, despite the influence that this body has on disclosure, thanks to its supervisory and monitoring functions. This study bridges this gap by analysing the effect of the audit committee attributes on integrated reporting quality (IRQ) from an agency theory perspective. The regression analysis, conducted on a sample of 125 international firms, demonstrated a positive effect of size, independence and meeting frequency of the audit committee on IRQ and a non‐significant effect of financial expertise.

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“…The variations in ESG disclosure (Raimo et al, 2020a) are measured through an analysis of integrated reports, which represent the last frontier of corporate disclosure 2019b;Raimo et al, 2019;Salvi et al, 2020a;García-Sánchez et al, 2020). Atlantia has long been committed to ESG practices and was one of the first companies to adopt integrated reporting in Italy.…”

Section: Introductionmentioning

confidence: 99%

Is ESG Disclosure a Means to Respond to Catastrophic Events? A Case Study Analysis

Marrone¹,

Oliva²

2020

IJBM

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According to the legitimacy theory, disclosure can be considered as a tool for responding to the changing perceptions of a company's stakeholders. Based on this theory, this study, through a case study, examines the reaction of companies in terms of environmental, social, and governance (ESG) disclosure to catastrophic events that have a negative effect on the corporate image. Specifically, this study examines the integrated reports provided by Atlantia in the two years preceding the collapse of the Morandi bridge and in the year of the catastrophic event. The results, however, do not demonstrate significant changes to the ESG disclosure by Atlantia following the catastrophic event. The changes made can in fact be considered as a normal evolution of disclosure policies and not as an attempt to repair the lost legitimacy.

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Non-financial information and cost of equity capital: an empirical analysis in the food and beverage industry

Cited by 64 publications

References 113 publications

Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship

Mandatory disclosure, greenhouse gas emissions and the cost of equity capital: UK evidence of a U‐shaped relationship

Do audit committee attributes influence integrated reporting quality? An agency theory viewpoint

Is ESG Disclosure a Means to Respond to Catastrophic Events? A Case Study Analysis

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